USDA Information Management: Proposal to Strengthen Authority of the
Chief Information Officer (Testimony, 03/03/98, GAO/T-AIMD-98-96).

Pursuant to a congressional request, GAO discussed the problems and
challenges the Department of Agriculture (USDA) has faced in managing
the more than $1 billion it spends annually on information technology
(IT) investments, as well as recent IT reform legislation that
established the Chief Information Officer (CIO) position in federal
agencies.

GAO noted that: (1) in fiscal year 1998 alone, USDA plans to spend about
$1.2 billion on information technology and related information resources
management (IRM) activities; (2) USDA has a long history of problems in
managing its substantial investments in IT; (3) while many factors have
contributed to these problems, a major cause was the lack of strong IRM
leadership, accountability, and oversight of the acquisition and use of
departmental IT investments; (4) consequently, over time, the department
has invested hundreds of millions of dollars in hundreds of systems that
are not interoperable with others in the agency and that actually
inhibit the use and sharing of information; (5) after more than a decade
of poor IT planning and program management by federal agencies, Congress
enacted the Clinger-Cohen Act of 1996 which, in part, seeks to
strengthen executive leadership in information management and institute
sound capital investment decision-making to maximize the return on
information systems investments; (6) other reform legislation includes
the Paperwork Reduction Act of 1995, the Chief Financial Officers Act of
1990, and the 1993 Government Performance and Results Act; (7) together,
Clinger-Cohen and these other laws provide a powerful framework under
which federal agencies such as USDA have the best opportunity to improve
their management and acquisition of IT; (8) a central element of
Clinger-Cohen was the requirement that the head of each executive agency
designate a CIO; (9) H.R. 3280 presents requirements to clarify and
enhance the authorities of the department's CIO; (10) these requirements
are discussed in five major sections; (11) the first addresses the CIO's
relationship to the Secretary and the department's Executive Information
Technology Investment Review Board; (12) the next three present
requirements as they relate to developing and information technology
architecture, providing funding for the CIO's office, and establishing
control over IT staff across the department; (13) the last provision
discusses an annual Comptroller General report on compliance; and (14)
GAO sees the thrust of H.R. 3280 as, for the most part, consistent with
the goals of Clinger-Cohen and other legislation designed to strengthen
executive leadership in information management.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  T-AIMD-98-96
     TITLE:  USDA Information Management: Proposal to Strengthen 
             Authority of the Chief Information Officer
      DATE:  03/03/98
   SUBJECT:  Chief information officers
             Information resources management
             Information technology
             Strategic information systems planning
             Systems conversions
             Internal controls
             Accountability
             Systems compatibility
             Proposed legislation

             
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Cover
================================================================ COVER


Before the Subcommittee on Department Operations, Nutrition, and
Foreign Agriculture, Committee on Agriculture, House of
Representatives

For Release on Delivery
Expected at
9:30 a.m.
Tuesday,
March 3, 1998

USDA INFORMATION MANAGEMENT -
PROPOSAL TO STRENGTHEN AUTHORITY
OF THE CHIEF INFORMATION OFFICER

Statement of Joel C.  Willemssen
Director, Civil Agencies Information Systems
Accounting and Information Management Division

GAO/T-AIMD-98-96

GAO/AIMD-98-96t


(511453)


Abbreviations
=============================================================== ABBREV

  CIO - Chief Information Officer
  IRM - information resources management
  IT - information technology
  USDA - U.S.  Department of Agriculture

============================================================ Chapter 0

Mr.  Chairman and Members of the Subcommittee: 

We are pleased to be here today to assist the Subcommittee by
discussing the bill, H.R.  3280, cosponsored by yourself and
Congressman Latham to strengthen the authority of the Department of
Agriculture's (USDA) Chief information Officer.  To provide some
background for my testimony this morning, I will briefly discuss the
problems and challenges USDA has faced in managing the more than $1
billion it spends annually on information technology (IT)
investments, as well as recent IT reform legislation that established
the Chief Information Officer (CIO) position in federal agencies.  I
will then summarize the bill's provisions, designed to clarify and
enhance the CIO's authority at USDA, and briefly convey our views on
these provisions. 


   USDA:  SIZE, COMPLEXITY MAKE
   DEPARTMENT ENORMOUS USER OF
   INFORMATION TECHNOLOGY
---------------------------------------------------------- Chapter 0:1

The influence of USDA on millions of Americans makes it essential
that the department plan and manage its information technology
wisely.  USDA's size and complexity, however, make this far from
simple.  It has a diverse portfolio of over 200 federal programs
throughout the nation and the world.  The department delivers about
$80 billion in programs, at a cost in federal outlays of an estimated
$54 billion.  The fourth largest federal agency, USDA employs over
100,000 individuals in 31 agencies and departmental offices having
multiple and sometimes disparate missions.  Its responsibilities
range from forests and timber to food assistance for the needy and
the safety of meat and poultry products for human consumption. 

In fiscal year 1998 alone, USDA plans to spend about $1.2 billion on
information technology and related information resources management
(IRM) activities.  It has reported spending more than $8 billion on
IT over the past decade.  During this time, USDA has seen its annual
IT expenditures nearly double. 


   STRONG LEADERSHIP ESSENTIAL TO
   OVERCOMING LONG-STANDING
   PROBLEMS MANAGING INFORMATION
   TECHNOLOGY INVESTMENTS
---------------------------------------------------------- Chapter 0:2

As we testified before this Subcommittee last spring, USDA has a long
history of problems in managing its substantial investments in IT.\1
We chronicled many cases dating back to 1981 in which the department
had not effectively planned major computer modernization activities
or managed IT resources.  Such ineffective IT planning and management
have resulted in USDA's wasting millions of dollars. 

While many factors have contributed to these problems, a major cause
was the lack of strong IRM leadership, accountability, and oversight
of the acquisition and use of departmental IT investments.  Over the
years USDA's component agencies were allowed to independently acquire
and manage IT investments solely on the basis of their own parochial
needs or interests.  Because of this, USDA agencies have continued to
independently plan, acquire, and develop separate systems, without
considering opportunities to integrate systems and share data. 

Consequently, over time, the department has invested hundreds of
millions of dollars in hundreds of systems that are not interoperable
with others in the agency and that actually inhibit the use and
sharing of information.  In fact, data are often inaccessible and
underutilized outside of and even within USDA's individual agencies
for identifying problems, analyzing trends, or assessing crosscutting
programmatic and policy issues. 


--------------------
\1 USDA Information Management:  Extensive Improvements Needed in
Managing Information Technology Investments (GAO/T-AIMD-97-90, May
14, 1997). 


   LEGISLATIVE REFORMS PROVIDE
   FRAMEWORK FOR IMPROVED
   INFORMATION TECHNOLOGY
   ACQUISITION, MANAGEMENT
---------------------------------------------------------- Chapter 0:3

Unfortunately, USDA's experiences with information technology
management are not atypical among government agencies.  After more
than a decade of poor IT planning and program management by federal
agencies, as just described for USDA, the Congress enacted the
Clinger-Cohen Act of 1996, which, in part, seeks to strengthen
executive leadership in information management and institute sound
capital investment decision-making to maximize the return on
information systems investments.  It is important to note that just
as technology is most effective when it supports defined business
needs and objectives, the Clinger-Cohen Act is at its most powerful
when integrated with the objectives of other, broader, governmentwide
management reform legislation that USDA is also required to
implement. 

One such reform is the Paperwork Reduction Act of 1995, which
emphasizes the need for an overall IRM strategic planning framework,
with IT decisions linked directly to mission needs and practices. 
Another is the Chief Financial Officers Act of 1990, which requires
that sound financial management practices and systems essential for
tracking program costs and expenditures be in place.  Still another
is the 1993 Government Performance and Results Act, which focuses on
defining mission goals and objectives, measuring and evaluating
performance, and reporting results.  Together, Clinger-Cohen and
these other laws provide a powerful framework under which federal
agencies such as USDA have the best opportunity to improve their
management and acquisition of IT. 


   THE CHIEF INFORMATION OFFICER
---------------------------------------------------------- Chapter 0:4

A central element of Clinger-Cohen was the requirement that the head
of each executive agency designate a CIO.  Much more than a senior
technology manager, this top-level executive--reporting directly to
the agency head--is to be responsible for mission results through
technology by working with senior managers to achieve the agency's
strategic performance goals.  Moreover, the CIO is to promote
improvements in work processes and develop and implement an
integrated, agencywide technology architecture.  The CIO is also
required to monitor and evaluate the performance of IT programs, and
advise the head of the agency whether to continue, modify, or
terminate a program or project.  Further, the CIO is responsible for
strengthening the agency's knowledge, skills, and capabilities to
effectively manage information resources. 


   A BILL TO STRENGTHEN CIO
   AUTHORITIES AT USDA
---------------------------------------------------------- Chapter 0:5

H.R.  3280 presents requirements to clarify and enhance the
authorities of the department's CIO; these requirements are discussed
in five major sections.  The first addresses the CIO's relationship
to the Secretary and the department's Executive Information
Technology Investment Review Board.  The next three present
requirements as they relate to developing an information technology
architecture, providing funding for the CIO's office, and
establishing control over IT staff across the department.  The last
provision discusses an annual Comptroller General report on
compliance.  More specifically, the sections and some information
about them include the following. 


      POSITION OF CHIEF
      INFORMATION OFFICER,
      DEPARTMENT OF AGRICULTURE
-------------------------------------------------------- Chapter 0:5.1

This section requires that the CIO report directly to the Secretary,
and that the CIO shall not be under the direction or control of the
Deputy Secretary or other official or employee of the department. 
This section also requires the CIO to serve as vice chair of the
department's Executive Information Technology Investment Review
Board--or any other entity established for this purpose--and to
review and approve IT acquisitions by USDA offices and agencies. 

The Secretary of Agriculture established the CIO position on August
8, 1996.  That same day, he announced the designation of the
department's then-Deputy Assistant Secretary for Administration to
serve as acting CIO, and has since appointed this individual as
USDA's first departmental CIO.  However, we were advised that the
Secretary has not yet issued a formal delegation of authority
describing the CIO's authority and responsibilities. 

USDA established the Executive Information Technology Investment
Review Board on July 1, 1996, to coordinate and prioritize the
department's IT investments, and to provide a critical link between
IT and agency missions.  Comprising senior-level managers, the board
is also supposed to ensure that USDA technology investments are
managed as strategic business resources supporting efficient and
effective program delivery.  Moreover, USDA's Fiscal Year 1998
Appropriations Act provides that all IT acquisitions for new systems
or significant upgrades must be approved by the CIO, with the
concurrence of USDA's Executive Information Technology Investment
Review Board.  The CIO told us that she had reviewed and approved the
department's fiscal year 1998 and fiscal year 1999 IT investment
package and submitted it to the board in September 1997, which then
concurred with the investment package as submitted. 


      RESPONSIBILITIES OF CHIEF
      INFORMATION OFFICER WITH
      REGARD TO INFORMATION
      TECHNOLOGY ARCHITECTURE
-------------------------------------------------------- Chapter 0:5.2

This section requires the CIO to be responsible for designing and
implementing an information technology architecture for the
department.  It also requires the CIO to ensure that development,
acquisition, procurement, and implementation of IT by any USDA office
or agency complies with the resulting architecture and results in the
best use of resources. 

In February 1997 USDA published an initial draft version of a
high-level information technology architecture.  However, the CIO
said that little has been done since then and that much work remains
to refine that version. 


      AVAILABILITY OF AGENCY
      INFORMATION SYSTEM FUNDS
-------------------------------------------------------- Chapter 0:5.3

This section requires each USDA office and agency to annually
transfer to the control of the CIO an amount equal to 4 percent of
the estimated expenditures to be made by that office or agency for
equipment and software.  The funds transferred are to remain
available until expended by the CIO for carrying out responsibilities
of the CIO, as outlined in this bill, Clinger-Cohen, and the
Paperwork Reduction Act.  Additionally, funds may be used when
developing, acquiring, procuring, or implementing departmentwide
information systems or to make all mission-critical systems Year 2000
compliant.\2

Mr.  Chairman, it is a policy call whether to transfer no-year funds
to the CIO annually and what amount is required in addition to other
sources of funding available to the CIO.  In this regard, the CIO
already obtains appropriated funds to carry out responsibilities
under Clinger-Cohen and other legislative mandates.  In addition, the
CIO's office uses working capital funds to support departmentwide
IT-related activities, such as operating its Kansas City data center
and carrying out telecommunications activities. 


--------------------
\2 For the past several decades, information systems have typically
used two digits to represent the year, such as "98" for 1998, in
order to conserve electronic data storage and reduce operating costs. 
In this format, however, 2000 is indistinguishable from 1900 because
both are represented as "00." As a result, if not modified, computer
systems or applications that use dates or perform date- or
time-sensitive calculations may generate incorrect results beyond
1999. 


      AUTHORITY OF CHIEF
      INFORMATION OFFICER OVER
      INFORMATION TECHNOLOGY
      PERSONNEL
-------------------------------------------------------- Chapter 0:5.4

This section creates the position of Deputy Information Officer
within the CIO's office, while abolishing the separate CIO positions
within the department's agencies and offices.  It also requires that
managers of major IT programs and projects within USDA shall be
subject to the CIO's approval and that the CIO shall provide his or
her perspective as a factor in the performance reviews of such
persons.  Also covered under this section are the temporary detail
and assignment of personnel to the CIO's office and the transfer to
the CIO of the direction and control of officials responsible for
procurement of IT across the department. 

As we testified last October on the importance of having strong CIO
leadership at federal agencies, we support the establishment of a CIO
structure at major agency component and bureau levels because it may
be difficult for the CIO at a large department to adequately oversee
and manage the specific information needs of a department's major
components.\3 Such a management structure is particularly important
in situations, such as at USDA, where the departmental components
have large information technology budgets or are engaged in major
modernization efforts that require substantial CIO attention and
oversight.  In the Conference Report on the Clinger-Cohen Act, the
conferees recognized that agencies may wish to establish CIOs for
major components and bureaus.\4

We believe that where utilized, such component-level CIOs should have
responsibilities, authority, and management structures that mirror
those of the departmental CIO.  However, USDA could not readily
provide information to identify the current organizational structures
across USDA, where each of its component agency CIOs was positioned,
or a description of their roles and responsibilities.  We were told
by the department's CIO that the role of the CIO at the component
level has not been defined consistently across USDA agencies. 

According to the CIO's office, USDA agencies and departmental offices
have a total of 16 positions that are either CIOs or senior IT
officials with equivalent leadership roles.  We were told that the
roles and responsibilities of these officials differ from one agency
to the next; some control all IT staff resources and others do not. 
Additionally, we were told that in most cases these officials report
to their component management; USDA's CIO then works with these
individuals through the department's Information Resources Management
Council.  The council has responsibility for planning, approving, and
overseeing departmentwide IT projects.  The bill would consolidate
these agency CIO positions under the departmental CIO. 


--------------------
\3 Chief Information Officers:  Ensuring Strong Leadership and an
Effective Council (GAO/T-AIMD-98-22, Oct.  27, 1997). 

\4 H.R.  Conf.  Rep.  No.  104-450 at 977 (1996). 


      ANNUAL COMPTROLLER GENERAL
      REPORT ON COMPLIANCE
-------------------------------------------------------- Chapter 0:5.5

This section requires that, not later than January 15 of each year,
the Comptroller General shall submit to the Congress a report
evaluating compliance by USDA's CIO and the department with this
proposed legislation.  The bill provides that the report should
include a review and compilation of spending by the department on
information resources necessary to assess compliance with the annual
transfer of funds to the CIO and use of these funds, as well as the
CIO's performance under this proposed legislation.  It also provides
that the report should include an evaluation of the department's
success in creating a departmentwide information system and ensuring
that all mission-critical systems are Year 2000 compliant.  In
addition, this section provides for the Comptroller General to
include other recommendations and evaluations considered appropriate. 

We are prepared to assist the Subcommittee in its efforts to ensure
USDA's compliance with any new legislative requirements.  It is worth
noting, however, that because USDA's Inspector General is responsible
for auditing the department's annual financial statements, it may be
more efficient to have that office review and compile spending data
on information resources pertaining to the annual transfer and use of
funds. 


   THE BILL:  GAO'S PERSPECTIVE
---------------------------------------------------------- Chapter 0:6

Mr.  Chairman, we support your effort and that of the Subcommittee
and Mr.  Latham to ensure strong and effective CIO leadership at USDA
by providing for more accountability and responsibility over the
substantial investments the department makes in information
technology.  We see the thrust of this bill as, for the most part,
consistent with the goals of Clinger-Cohen and other legislation
designed to strengthen executive leadership in information
management. 

We testified last October on the importance of strong CIO leadership
at federal agencies.  At that time we said that various approaches
exist as to how the CIO position can best be utilized to implement
legislative requirements under Clinger-Cohen and other federal
laws.\5 These laws, along with guidance from the Office of Management
and Budget and our best practices experience with leading
organizations, define common tenets for the CIO position.  What is
important is that the approach be consistent with these tenets. 
Specifically, agencies should

  -- appoint a CIO with expertise and practical experience in
     technology management;

  -- position the CIO as a senior partner reporting directly to the
     agency head;

  -- ensure that the CIO's primary responsibilities are for
     information management;

  -- have the CIO serve as a bridge between top management, line
     management, and information management support professionals,
     working with them to ensure the effective acquisition and
     management of information resources needed to support agency
     programs and missions;

  -- task the CIO with developing strategies and specific plans for
     the hiring, training, and professional development of staff in
     order to build the agency's capability to develop and manage its
     information resources; and

  -- support the CIO position with an effective CIO organization and
     management framework for implementing agencywide information
     technology initiatives. 

Having an effective CIO with the institutional capacity and structure
needed to implement the management practices embodied in the broad
set of reforms set out in Clinger-Cohen and other legislation is
crucial for improved planning and management of IT investments. 
Success at USDA will depend on how well the department implements
such legislation, and how well the CIO exercises whatever authority
she possesses to make positive change--and the degree to which this
individual is held accountable for doing so. 


--------------------
\5 GAO/T-AIMD-98-22, Oct.  27, 1997. 


-------------------------------------------------------- Chapter 0:6.1

Mr.  Chairman, this concludes my statement.  I would be happy to
respond to any questions you or other members of the Subcommittee may
have at this time. 


*** End of document. ***